BUILDING YOUR PORTFOLIO
Getting on the property investment ladder can be difficult but once you have your first property, it can be extremely motivating and exciting to see a monthly cash flow start to build up over time.
Many investors choose to try and continue to build their portfolio into multiple properties in order to increase their monthly cash flow and also increase the potential capital growth returns.
A popular strategy for investors looking to build their portfolio is to recycle their cash from another property. They can do this through remortgaging. If they have equity within another property, they can remortgage and release some of that equity to help them finance their next investment. This does not happen every time but it is very common and possible.
This means that investors are not constantly having to save for large deposits for their next investment. They can use the money put into previous properties that have grown over time over and over again. There are many factors that are in play for this to happen, such as house prices rising and falling, any refurbishments or decorations to the house, investment into the local area, home report valuations, mortgage provider criteria, etc.
Another way in which property portfolios can grow in through a joint venture (JV). Joint ventures involve teaming up with another investor and agreeing on specific terms in which you will work together to achieve a profitable property investment. This really emphasises the importance of networking with other like-minded individuals and property investors as business partnerships can be formed. Joint ventures may also have the benefit of reducing the amount of capital needed to put into an investment property, reducing the amount of time to raise capital.